As you know I have gone Galt.
I work as little as I can. I am trying to make less than $30,000 per year (not too hard in this economy). And I have gone back to school. I have acquired no assets which can be taxed or taken from me. And in essence have enjoyed a hell of a lot of free time and vacation time.
In short I am out of the game and refuse to contribute anything to society be it either through taxation or production. Admittedly, I am more of the fringe elements in this country, but consider what would happen to society if most productive people had the epiphany I've had and realized their time is worth more than the pittance of money the government will let you have.
But contrast this current state with me in my youth, and it is night and day. Back then I would work my ass off. 80 hour work weeks were regular for me. Overtime pay as well as the added employment security that came with dedicating myself to my employer resulted in a ton of economic production from myself (as well as tens of thousands of additional tax dollars paid to into the government coffers).
What is interesting though is that it is the "overtime" aspect of economic production that is really the only thing that will get an economy booming again. You don't dedicate yourself to overtime unless you view there is a future or a benefit to it (in addition to the over time pay). However, if you are punished because of progressive taxation on your overtime income and you see no economic future, therefore why would you do such a stupid thing as essentially committing yourself to slavery? Over time, which is precisely what the economy needs, does not make any economic sense.
So you understand when I say, "enjoy the decline" I really mean, I want you to ENJOY the free time forced upon you by the decline. Because, well, you don't have any other choice.
I think you have just touched on the tip of the iceberg. People do start to realize their overtime, is a waste of time. But they also change other behaviors as well. More and more people start to take part in the underground economy. Most illegal immigrants work on a cash only basis. Both the employer and employee, save on all sorts of government regulation costs. Many people also start to purchase goods and services on a cash only basis. A lot of home repair and renovation businesses, will offer the consumer a much cheaper cash only price. This enables the business to keep the transaction off the books, and avoid a tax payment.
ReplyDeleteIn a high tax environment, people will also spend a lot of time and money, on tax lawyers and accountants. This money is being taken out of the productive side of the economy, and put into tax avoidance schemes.
Yes, this is a far bigger problem then just killing the incentive to work overtime.
With you 100%!!
ReplyDeleteHave you given any thought to how this all ends and if it ever will in our lifetimes? We are about the same age I believe. Can you see a time when we ca go back to being happy about being productive?
To Anon,
ReplyDeleteYeah, I do see a movement towards an underground economy, but ironically, people are going to be making so little money that they'll be in an income tax bracket that is so low it won't matter if they try to dodge taxes or not. I personally don't even want to risk it, so I do all of my business above board, but for me it doesn't matter because I make so little (actually you WANT to file a tax return to get a refund).
To Tony,
I picture it ending one of two ways.
1. Women, younger folk and liberals in general wake the ef up and start realizing the financial reality of their state and federal government and the nation at large and instead of regurgitating what they were fed. They study the budgets, the study economics and they take more than a tacit interest in their childrens' futures and realize "Oh my god. The conservatives weren't just a big conspiracy plotting to destroy us. They were trying to save us!" Tea Party/Republican house, senate and president enact stringent financial reforms, balance the budget, cut taxes and bring the US back from the brink.
2, which is the more likely option, people continue blaming "Bush Policies" for the economic crisis we're in, go back to watching American Idol, we keep majoring in theater and zoology, and believe in global warming and believe "green jobs" will somehow bring back annual GDP growth of 5.7% per year. The economy doesn't improve, people demand "action" but believe that action and salvation will come from the government and MORE leftist, Keynesian programs and everybody getting doctorates in sociology. The dollar collapses. Capital flight ensues. Taxing wealth begins. 20-30 years we'll be in the "economic wilderness" as time and time again these stimulus programs fail AND throw in a couple successful terrorist attacks on the US homeland as well. Slowly the American public will wake up and realize what had happened, but it will be too late because, frankly the people who could save the economy (namely men, entreprenuers, capitalists and innovators) will have been so thoroughly disgusted with the way society has treated them (economically, but also socially and legally I would say) they will have no incentive to spend what little amount of their finite lives they have left on this planet "saving the country." We go to what remains of Vegas and gamble. A new generation that is sick of the economic demise and delay will be born, they will ignore what their Gen X, Gen y parents say and will say, "we're not accepting this shitty lifestyle anymore" and they will inevitably rediscover capitalism. Good luck though overthrowing the now-thoroughly entrenched government unions and political elites, but they inevitably will succeed much like the Russian youth did in throwing out the USSR.
You and I will be in our 70's and will get to see it come full circle, but we will not enjoy anything as grand as a "successful career" or "starting a successful business" let alone "having a family with a mortgage free white picket fence house." We will however, have enjoyed a thoroughly work-free life where we made just enough to get by. I will never get my P-51 Mustang, not even my Pontiac Solstice, but I will enjoy 2-3 month vacations elsewhere as I keep my expenses to a SEVERE minimum. And if you think the men in the nursing homes today have it good due to mortality rates of men, you and I and other men of the capitalist faith will be romance GODS at the nursing home, however, we will be too busy to bother with the women making their advances towards us on account we will be starkly reminded as to who consistently voted for socialism and destroyed the American dream...not to metnion we will be too busy playing X-Box 47.
On reason #2, yes these things will most likely happen. But massive change in societies have always taken place after the collapse of; paper currencies, debt defaults, high tax regimes, speculative bubbles, currupt governments, and other reasons as well. However, the danger is that the change can be good or evil. If the US defaults on their debt, things will change very quickly, hopefully for the better.
ReplyDeleteBeing salaried really sucks, especially when if you put in less than 10 to 15% overtime, you're first on the layoff list.
ReplyDeleteMeanwhile, the company continues to layoff people every quarter and dumps more work on the survivors. With the sick economy, there are no other jobs out there, so we're stuck in this death march.
"consider what would happen to society if most productive people had the epiphany I've had and realized their time is worth more than the pittance of money the government will let you have.
ReplyDelete"
I do not think you have to have most. I think that if as little as 5% of the productive population goes Galt (or getting out, after all look at how NYC is losing the high earners, and TX is picking them up) the whole house of cards would come crashing down.
And, the "progressives" want to increase taxes on the rich. The equivalent of killing the golden goose.